Non-Governmental Organizations (NGOs) An organization that is NOT administered by federal, state, or local government. Most have a membership base

Recreation-related NGOs Recreation clubs for members Volunteer groups for museums, nature centers, parks, etc... (e.g., “Friends groups”) Other membership-based groups (e.g., TNC, Audubon Society)

Formational meeting: benefits vs. costs Bylaws Incorporate? YES: Certificate of Incorporation No: Charter Employer Identification Number Federal income tax exemption State sales tax exemption

Benefits of NGOs Provide community services not provided by government Provide a unified voice Provide a mechanism to accomplish similar goals of members Distribute association-related information quickly

Costs of NGOs Difficult for members to volunteer time Volunteer burn-out Conflicts between personal and organizational goals Costs of membership (e.g., dues, travel to meetings)

Formational meeting: benefits vs. costs Bylaws Incorporate? YES: Certificate of Incorporation No: Charter Employer Identification Number Federal income tax exemption State sales tax exemption

Bylaws Written, detailed set of internal laws that govern the activities and procedures of an organization. Identify NGO as “not-for-profit”

What is a “not-for-profit” NGO? An organization whose members receive no monetary profit.

Formational meeting: benefits vs. costs Bylaws Incorporate? YES: Certificate of Incorporation No: Charter Employer Identification Number Federal income tax exemption State sales tax exemption

Certificate of Incorporation A written document that identifies the name, purpose, and duration of the corporation. Filed in each state that organization offices are located in (DOS) Usually filed by an attorney Processing takes about 1 year

Charter A written document that: states what the organization’s and board’s powers are shows (through signatures) that the members agree to the association. Necessary for obtaining “tax exempt” status

Why incorporate? Liability Status as a legal entity Organizational permanency Buying/selling property

Formational meeting: benefits vs. costs Bylaws Incorporate? YES: Certificate of Incorporation No: Charter Employer Identification Number Federal income tax exemption State sales tax exemption

Formational meeting: benefits vs. costs Bylaws Incorporate? YES: Certificate of Incorporation No: Charter Employer Identification Number Federal income tax exemption State sales tax exemption

Two types of federal tax exempt organizations Internal Revenue Code 501(c)(3) status charitable, religious, scientific, educational, literary, and amateur athletic organizations IRC 501(c) status business and trade organizations, and recreation clubs

Why is tax exemption important? Applying for grants Bulk-mailing benefits Some lobbying permitted (<5% budget) No taxes on income No sales tax

Summary: Choices for NGOs Corporations For-profit Not-for-profit Not-for-profit tax-exempt: 501(c)(3) 501(c) Charter organizations Not-for-profit Not-for-profit tax-exempt: 501(c)(3) 501(c)